VPN is the way to go if you want the optimal TFS experience with TFS 2005 or TFS 2008. While TFS mainly uses web service based protocols that can all go over SSL, there are a few small things that will not work unless you have proper network access. For example:
As well as a few other little niggles. Going the VPN route will also mean that your TFS installation will vary less from a standard base TFS installation which gives you some peace of mind that you won't run into any problems when it comes to upgrading to a new version, applying service packs etc. (or at least any problems you run into will have been run into by many before :-) ). Going the SSL route you are treading a less worn path - though obviously plenty of people do run it that way including CodePlex and all the commercial companies that provide a hosted TFS installation.
The downside of VPN is that usually you are granting users to an entire section of your network (unless you are running TFS in it's own mini private network or something). If you go down the SSL route then be sure to properly test the new team projects as this is easy to break and you might not realise until you try and create one either inside or outside the network.
For additional information, see Chapter 17 of the TFS Guide.